Last fall, the prime minister’s communications director called President Bush a moron. George W. Bush has a 1975 MBA from Harvard Business School.
According to Webster’s, a moron is “ a mentally retarded person whose intelligence is equal to that of a child between 7 and 12 years of age— a very stupid person.” I have taught finance to MBAs for 30 years and I can say with absolute certainty that morons do not get MBAs from any business school, let alone arguably the leading business school in the world. The comment does, however, raise an interesting question. Is an MBA good education for an elected job like president of the United States or prime minister of Canada?
George W. Bush is the first US president or Canadian prime minister to have an MBA but with so many now getting MBAs, he surely will not be the last. The MBA is increasingly the education of choice for those who aspire to run organizations of any type, not just corporations. Demand for MBA education has been skyrocketing and there is no end in sight. Twenty years ago a standard two-year program of study, the MBA has evolved into a cottage industry of full time MBAs, executive MBAs, electronic MBAs and international MBAs. Specializations range from accounting, finance, management and marketing, to the not-for-profit sector, health care, tourism and professional services.
MBA education is about problem-solving and decisionmaking in an organizational setting. Drummed into every MBA is a time-honoured sequential process: identify and describe your problem; with a very open mind develop options for dealing with the problem; know your objectives— what you want to achieve, comprehensively and, if possible, quantitatively; analyze a short list of your options in light of your objectives: benefits and costs, net present values, rates of return, paybacks, risk assessments and sensitivity comparisons; make a decision on a timely basis; implement your decision, keeping options open where possible should your decision not work out as expected; assess performance and make adjustments; do a post-audit; and learn from your mistakes.
It is hard to imagine a president or prime minister not being well served by an ability to effectively execute such a process. A big part of successfully leading a country, after all, is making decisions that solve the citizens’ problems. Nor is such a process entirely innate: to a degree, anyway, it must be taught and learned. Running a country in the absence of such a process ends up, at best, in squandered resources, frustration, confusion and lost opportunities, and at worst, in chaos. Count one for the MBA.
A must for a president or prime minister is an ability to think and operate in big-picture terms. Country leadership is the biggest of the big picture jobs. If anything is up an MBA’s alley, it is the big picture. From day one, MBAs are taught that virtually anything can impact on an organization in a material way, and it is their responsibility as executives to think through those “anythings.” With that in mind, MBAs get a big dose of demographics, macro-economics, social trends, trade, technology, government and the physical environment. MBAs also take a number of courses in functional, organizational areas like accounting, finance, marketing and production. The idea is to develop expertise and comfort in translating the big picture environment that cannot be controlled into decisions that can be controlled with respect to the likes of product line, pricing, promotion, inventories, receivables, financing method, dividends and compensation. What country leader would not benefit from such capability? Count two for the MBA. For example, had some of our leaders had just one good course in finance and the consequences of imprudent finance, consider how much better off we might be.
Management is about getting things done on time and within budget. It is finding, organizing and motivating the people and capital necessary to achieve objectives. MBA students do countless cases aimed at showing what works and does not work in this regard. How do you organize people? How do you compensate and otherwise motivate people? How do you evaluate people? When and how should you change people? How do you know when things are seriously off the rails? Where and how do you get the needed capital? What type of capital is best for the situation at hand? These are just some of the questions that MBAs consider until they cannot see straight. Again, what country leader would not benefit from such capability? Count three for the MBA.
Delegation is an important aspect of management that warrants particular comment. A president or prime minister that cannot delegate is doomed. He will drive himself and everyone around him crazy. Nor will it be good over time for the country. A leader cannot micromanage a country into enduring prosperity. There is too much to know, too much to do, too many people and relationships involved, and things are too complicated and change too quickly.
Country leaders with the confidence to delegate and the skills to find the right people are well ahead of the game. Count four for the MBA. MBAs are not taught to do it themselves. MBAs are taught to get it done through people by defining objectives, forcing accountability and measuring outcomes. George W. Bush’s presidency is a case study in effective delegation. Notice his constant references to objectives; the extent to which he lets others run with the ball; and the relentless focus on performance, accountability and measurement. Dubya is an MBA through and through.
There is another one to count for the MBA. Leading a country puts a person under intense pressure: family, health, recreation and personal development always get short shift; the hours, the travel and the competing demands are horrendous; the time frame for making decisions is always too short; the information is never complete; the stakes can be staggering. Entering and exiting photos of leaders so often show the huge toll that the stress of the job has taken.
No educational experience can come close to replicating the pressure cooker of country leadership. That said, the MBA makes a good stab. The MBA develops and tests the intellect. But as important, the MBA also develops and tests time management, confidence, stamina, coping skills, priority-setting and the ability to deal with uncertainty and surprises. This is not to say that many other educational programs are not demanding. It is only to say the MBA puts special— maybe unique— emphasis on not only knowledge accumulation and skill development, but also the ability to manage yourself, others and situations under pressure.
So much for the plus side of the MBA for presidents and prime ministers. There is another side. First, country leadership is as much about process as product; as much about perception as reality; as much about emotions and feelings as earnings per share, rates of return and market shares; as much about hopes and aspirations as plans and implementation schedules. MBA education is striving mightily to move in the intuitive, right-brain direction, but the bias is still unmistakable: hard analysis; focused, fact-based, rational decision-making; accountability; benchmarked performance. In the political world, things often turn on the background music and the MBA is categorically not background-music education.
Mackenzie King once observed that political leadership was often more about what was prevented than what was achieved. Executives who think that way are likely to have a short stay in the executive suite. The MBA is executive suite training. MBAs running countries may be ideally suited for making only the biggest of political blunders.
Second, MBA education is rooted in notions of consumer sovereignty, laissez-faire economics, profit maximization, cost minimization and efficiency. This “right wing” slant of the MBA may be good for stock prices and competitiveness, but it may be of less help to a country leader trying to move a people forward.
Great presidents and prime ministers seem to have a sixth sense— a kind of umbilical cord to the psyche of the people— about what is possible and when, which no MBA program can come close to teaching. My guess is country leaders will get more help in this regard from education in anthropology, classics, history, literature, political science, psychology and sociology. For example, in How to Read and Why, the eminent Yale humanities professor Harold Bloom tells people to read literature to “weigh and consider,” to “know ourselves better,” and because “we require knowledge, not just of self and others, but of the way things are.” Good advice for any president or prime minister, and you do not get much of this in an MBA. Bloom poses the question: “Information is endlessly available to us; where shall wisdom be found?” For Bloom, it is found in literature. If we could endow our leaders with anything, would wisdom not be close to the top of most lists?
Third, corporate organizational culture is very different from political organizational culture. Notions of empowerment are changing the corporation, but at heart it is still a command/control hierarchy driven by carrots for good performance, like pay raises, bonuses, perks and promotions, and sticks for poor performance, like pay cuts, demotions, unwelcome tasks and termination. In the political world, the organizations are both more fluid and more dependent on volunteers of often questionable loyalty, motivation and commitment.
Presidents and prime ministers must reapply for their jobs every four years or so to electorates who give new meaning to fickle, volatile and the “what have you done for me lately” mentality. The corporate world is rough, but in more predictable ways. And at the top of the corporate world the golden parachutes are a good deal more golden than in the political world. Why most executives do not thrive when they stick their toes in the political waters is at least partly explained by cultural differences. The MBA is heavily weighted in the corporate cultural direction.
Fourth, MBA thinking is neither rigid nor narrow, but it does push problem-solving and decision-making through a value-added prism. Things that do not in some sense add value, and fairly quickly, are usually not done unless there are unusual and compelling reasons to do them. Political thinking is much more flexible and ephemeral; people’s ever-changing nature demands it. The MBAs’ obsession with quantification and control will only take you so far in the loose political world of feelings and emotions. In the political world, the benefits and costs are far less quantitative and far more personal.
Fifth, what passes for critical thought is also quite different in the corporate and political worlds. Corporate critical thought is rooted in discerning effects on share prices, earnings per share, market position and competitiveness. Political critical thought is tied up in the likes of democracy, liberty, peace, equity, fairness, justice, security, opportunity, transparency and openness. The thought process learned in law school is perhaps more suited to the political world than that learned in MBA school. This may in part explain the success of so many legally trained people in politics over the years.
Finally, there is the issue of vision. Vision is that rare capacity to frame the destination and paint it in terms that inspire people to board for the journey. It is at the heart of leadership. Leadership without vision over time goes nowhere worth going. Often I have heard this question posed about potential political leaders: Does he/she have the “vision thing”? as if it is some undefinable, unteachable gift without which success is not possible. MBAs spend a lot of time talking about vision in a corporate sense, but my guess is corporate vision is not quite the kind of vision that a political leader needs to focus a people. People will die for a country; who would die for a corporation? That is a big but inevitable difference, given the very different organizing principles. The organizing principle of a corporation is profit; the organizing principle of a country is shared dreams, experiences, geography, goals and history.
The MBA is a wonderful degree; a splendid achievement. It can transform people and make all the difference in their lives and careers. I cannot imagine a president or prime minister being the worse off for the MBA experience. That said, it surely takes a whole lot more than you learn in MBA school to successfully lead a country. Then again, it takes a whole lot more than you learn in MBA school to successfully run a good sized business. Bottom line: an MBA is two years well spent for anyone, including a president or prime minister.
